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Autumn Statement 2016: Rates relief a welcome attempt to change the economics of investment in full fibre connectivity

AS16: Rates relief welcome attempt

Also on KPMG.com

Alex Holt, Partner and Head of Technology, Media and Telecommunications, KPMG UK, said:

“The Chancellor’s announcement of a 100 per cent business rates relief for five years on fibre is designed to change the investment economics for operators, so that new fibre investments are more attractive. As always, the devil will be in the detail, but today’s announcement is likely to be an important consideration for a number of network operators when planning their fibre strategies for the next few years. These operators will be looking for clarity from the Government on what the announcement means in practice, and this will need to be provided quickly if the Government’s goal of changing investment plans is to be achieved.

“It also heralds a significant shift in policy, with the Government taking a technology-specific, rather than technology-agnostic and outcome-based approach.

“Fibre and 5G will play a vital role in enabling productivity gains across all UK industries by driving emerging areas such as the Internet of Things, Artificial Intelligence and Robotics. The private sector will provide the vast bulk of the investment required to upgrade our mobile and fixed networks, but the economics don’t work quickly, or everywhere in the UK for that matter. The Government can and should continue to step-in, to fill the gaps and to further incentivise investment in strategic technologies like Fibre and 5G mobile networks if the UK to be a leader in ultrafast fixed and mobile communications."

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a revenue of £1.96 billion in the year ended September 2015. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 174,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.